Know whether you should invest in IEX shares now? What will be the future of IEX share? Is IEX a good investment for the long term? How much is IEX stock likely to rise in the future and will it become a multibagger stock?
Investors have many questions regarding Indian Energy Exchange i.e. IEX shares like;
- What will be the future of IEX share?
- How much returns can the company give in the future?
- Can IEX Shares Become a Multibagger in the Long Term?
- What are the share price targets of IEX in 2023, 2025 and 2030?
And the biggest question:
Is it a good idea to buy IEX shares now? Should the shares bought at this time be held or should they be sold?
Today we are going to talk about this
The ‘Indian Energy Exchange’ ie IEX is the power trading platform through which buyers and sellers trade electricity. PXIL and IEX are the only two main power trading exchanges in India where electricity is bought and sold online.
Of these two exchanges, IEX has a monopoly, meaning more than 92% of the energy trading of the entire market is done through the IEX exchange itself.
- By the way, a new power trading exchange HPX (Hindustan Power Exchange) has also come in India which has been started by PTC India, Bombay Stock Exchange and ICICI Bank.
- It is believed that HPX may reduce the monopoly of IEX in the coming times, which will also reduce the market share of IEX.
And about this there is a fear in the minds of investors that Do not lose their money by buying IEX shares…
And this is also a fear because of which The IEX stock is down almost 50% from its record high of Rs 300.
Now that IEX is a fundamentally strong company, some investors are looking for buying opportunities this fall.
Whereas those who had bought this share without understanding the business model of the company, without doing any research, only seeing the increase in the share price, now the same people are selling continuously, due to which the IEX stock is falling continuously.
How does an IEX company work and make money? Read now to know about IEX’s business model, IEX share news in hindi
A lot of people are positive about IEX share as the company has almost monopoly in its sector and it is the largest power trading exchange in India. Plus its Operating Profit Margin (OPM) is also very good about 80%
That’s why a lot of investors are bullish on this stock and they believe that Indian Energy Exchange stock can become a multibagger in the long run.
If we talk about the returns of the last few years, then in 5 years the company has given returns of about 200%.
However, due to the fall in Nifty and Sensex, this stock has come down a lot, along with the company did not present anything special in the quarterly results, due to which the stock kept falling even more.
If the IEX company produces good quarterly results in future, then the stock may go back up and investors can get good returns.
If we talk about long term investment, then by 2025 and 2030, IEX stock can become a multibagger stock. If you invest today, you are expected to get tremendous returns in the next 5 years.
Because the company’s business is great and IEX has the largest number of customers in this sector and there is still a lot of growth to be done in this sector.
There are many reasons as to why the IEX share price may rise in the future such as;
Power Exchange Market Will Expand In The Future
In India currently only 6% of electricity is traded on exchanges in the short term market whereas in develope countries this figure is as high as 30-80% and volumes are expected to increase in India too.
Energy trading will increase in the short term market
According to the government, now electricity distributors ie DISCOMS can exit from their long term PPAs after the 25-year contract expires. Gradually, the more DISCOMS exit such long term contracts, the more electricity trading will increase in the short term market and in this short term market IEX works by keeping 92% monopoly.
Meaning, the higher the volumes, the higher will be the commission of IEX, which is a good indicator of the future growth of IEX stock.
IEX will benefit from increasing power demand in future
India’s Per capita electricity consumption has increased continuously for the last 10 years, in the future it can increase by 37% by 2025.
With the increase in electricity consumption, the trading volumes of IEX will also increase, due to which IEX’s revenue and profits can increase rapidly by 2025.
Thus buying IEX shares can be a good investment for the long term future.
IEX’s profit will increase due to non-increasing expenses
You know that IEX is a power trading exchange on which online electricity trading is done, meaning electricity is bought and sold. It is exactly like BSE and MCX.
IEX is like an IT company and not like a power company. Meaning the company does not need to spend money in fixed assets every year.
They have to spend only for maintaining their exchange platform like investing in technology and software, hiring good talent and there are minor expenses like server cost.
And this is the reason why Indian Energy Exchange’s OPM i.e. Operating Profit Margin is around 80% which is considered very good.
Now you must have understood that the fixed cost of IEX does not increase every year while the sales and profit YOY (Year on Year) keep increasing continuously, giving the company a strong operating leverage, thus the stock will grow rapidly in the future.
IEX business can increase by entering new market
Iex company operates in a highly regulated market which is largely controlled by the government so there are only 2-3 players in this sector.
In such a regulated market, the government has allowed only IEX to do cross border trading, which means that our neighboring countries like Bangladesh, Nepal, Bhutan etc. will be able to buy electricity through IEX exchange, which will increase the volume of the company and ultimately increase sales and profit in the long run. The stock can give tremendous returns over the term.
Subsidiary company IGX may also increase business
Indian gas exchange ie IGX Which is a subsidiary company of IEX, on which trading of natural gas is done. In future, due to the increase in the consumption of natural gas, the company’s business can grow very fast, which will benefit the Indian Energy Exchange.
Because according to the Paris Climate Agreement, the government’s goal is to reduce carbon emissions. In which the share of natural gas by the government can increase from 6% to 15% by 2030.
Thus the growth of IGX can make IEX shares an investment with good multibagger returns in the long run.
How is IEX company performing? (IEX financial records details)
If seen, the IEX stock is not performing as well these days because the company’s quarterly results for the Q1 of FY23 i.e. June 2022 quarter have not been anything special.
This time the sales and profit have decreased as compared to the previous quarter, while the YOY is seen in revenue and profit by only 11%, which is much less than the previous performance of the stock.
Prior to the Q1 quarter of June 2022, the company’s sales and net profit also saw a decline in the quarter of March 2022, meaning this decline in profit and revenue in the quarter is the second consecutive decline.
If the company has to improve the coming quarterly results, then it will have to increase the volumes, which will increase the revenue of the company and In this way the share price of IEX may also increase.
This question is most of the people whether to buy IEX shares now or not? So now we are going to answer this.
Nowadays IEX share is trading between ₹ 150 to ₹ 200. If the company’s sales and profit increase in the coming quarters, then the stock may go up and if the company’s quarterly results fall for the third time in a row, then the stock may fall even more.
Is IEX stock overvalued or undervalued right now?
If you look at the valuation of the company, the stock is around 44. PE Ratio Trading on. Its book value is now close to 7.6 which is very low as compared to the share price and hence the stock is very expensive when looking at the price to book value ratios. (overvalued) looks like.
While some investors are confident in the business of IEX, they are considering this fall of 50% to the record high as a buying opportunity. According to him, shares with such a strong monopoly are rarely available at 50% discount.
How many returns have IEX shares given so far?
Looking at the share price history of IEX, since 2017 till now the company is listed on the stock exchange and since then the stock has given almost 200 percent returns to the investors.
If the decline since January is removed, the stock has given returns of more than 450% of the total returns.
The 52 week high of the stock in these 5 years is Rs 319 and the low price is Rs 150.
If you look closely The year 2021 has been the Golden Year for IEX as the stock gave over 200% to the investors in this year alone.
Meaning, if you had invested 1 lakh rupees at the beginning of the year, then at the end of the year it would have become 3 lakhs, meaning your money would have become 3 times.
Whether IEX stock will prove to be a good investment in future depends on the performance of the company. By the way, the company has always been doing new innovations like; Buying the Indian Gas Exchange (IGX) was a good decision which will bring in good revenue to the company in the long run.
The company is working in the power exchange market since 2008 and it is not that it is the only company but PXIL was a competitor but still for so many years. Indian Energy Exchange alone holds 92% market share.
This means that the IEX platform is more convenient for buyers and sellers, so they trade electricity only from the Indian Energy Exchange.
Based on the experience that the company has for so many years, the company can show good growth in future as well. dividend gives. So if one wants to buy this stock for long term then IEX can be a good investment of course.
Could IEX Stock Be a Multibagger in the Future? (Can IEX stocks become multibagger in future?)
Looking at the fundamentals of the company, it can be said that IEX stock has full potential to become a multibagger stock because the size of the power exchange market is currently only close to 7% in India while the maximum is up to 80% in developed countries, so you understand from this. Can you see how many opportunities are left in this market now.
Now since IEX has been the market leader for so many years and the concept of power exchange in India was also brought by this company. And if we talk about new companies entering the market, then let me tell you that competition is not a bad thing because the market size is bigger than competition, so if new companies enter this market then this market will expand rapidly.
And with the increase in market size, the revenue and profits of IEX will also multiply, due to which this stock has a lot of chances to become a multibagger.
Few questions related to IEX share
When will IEX share price rise?
According to experts, the industry structure of the power exchange market will improve in the coming times, which may increase the company’s revenue and profits and thus the share prices may also go up.
How much can IEX share grow by 2030?
If the company shows good profit and sales growth in the long term, then it can emerge as a multibagger stock.
What is the share price target of IEX for 2025?
If IEX performs well then the company can give 200% return to the investors by 2025 and thus the share price can also go up to the target of Rs 400.
What will be the future of Indian Energy Exchange?
The future of Indian Energy Exchange Company is very bright because the scope of expansion of that industry is very high in the sector in which the company operates. Thus, as the market size increases, the company’s revenue and profits will also increase.
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In this post you know what will be the future of IEX share, Whether to buy IEX shares now or not, how much the stock can grow in the future and how much return can the stock give in the long term.
If you have any query related to IEX share then definitely ask in comment box.